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9th Edition College Course Materials Deanna L. Sharpe, Ph.D., CFP®, CRPC®, CRPS® Associate Professor CFP® Program Director Personal Financial Planning Department University of Missouri-Columbia Please Note : Correct answers for each question are indicated in bold type. After each question, the number of the page containing information relevant to answering the question is given. When a calculation is necessary or the reasoning behind a given answer may be unclear, a brief rationale for the correct answer is also given. Part A: Retirement Planning Defined Contribution Plans Chapter 20: Cross-Tested/Age-Weighted Plan True/False 20.1 A target plan is a pension plan that uses an age-weighted contribution formula. 20.2 A cross-tested plan uses a fixed age-weighted formula. The plan is designed to maximize benefits for a firm’s highly compensated employees while providing whatever is necessary for remaining employees to satisfy nondiscrimination regulations 20.3 A self-employed person can adopt an age-weighted or cross-tested plan. Answers: 20.1 true [p. 193] 20.2 false [p. 193] 20.3 true [p. 197] Multiple Choice 20.4 Advantages of an age-weighted plan include each of the following except : a. can maximize retirement benefits of employees who enter the plan at older ages b. can replace a defined benefit plan and give approximately the same benefit to most
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This note was uploaded on 01/30/2012 for the course INS INS 3503 taught by Professor Tammimetz during the Fall '11 term at Mississippi State.

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